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Market Review - 27/07/2013 01:43GMT
Dollar falls against yen on speculation of Fed stimulus
The greenback fell sharply against the Japanese yen on Friday on speculation that the Federal Reserve will announce to keep its low interest rates for longer at its Wednesday's monetary policy meeting.
Versus the Japanese yen, dollar was under pressure throughout the day. Despite a recovery from Thursday's low at 98.87 to 99.41 in Australian morning, the pair met renewed selling at Tokyo open and fell to 98.62 in Asia due to selloff in Japan's Nikkei-225 index. Later, price edged lower in European session and penetrated previous key support at 98.26 to a one-month low at 97.95 in New York morning due to active cross buying of yen versus other currencies. Price traded narrowly in New York afternoon and closed at 98.27.
The single currency edged higher from Asian low at 1.3269 and rose 1-tick above Thursday's top at 1.3296 to 1-month peak at 1.3297 in European morning, however, lack of follow-through buying prompted profit-taking, euro retreated to 1.3253 in New York morning but then staged a recovery to 1.3295. Later, despite another brief retreat to 1.3255, price rebounded after failure to penetrate 1.3253 support and later edged to 1.3290, price closed at 1.3279.
The British pound traded narrowly in Asian session and rose briefly to 1.5417 in European morning, however, cross selling of sterling versus euro pressured the pair to 1.5356 in New York morning before staging a recovery to 1.5394 in U.S. afternoon.
In other news, EU Commission said 'Eurogroup working group has approved payment of next tranche of aid to Greece.' Portuguese Finance Minister Albuquerque said '1H government budget gap 3.4% of GDP vs planned 3%; Portugal needs a fiscal system that makes it more competitive; recent uncertainty made bond investors cautious, need to assure them government is stable.' IMF board said 'risks to U.S. economic outlook appear modestly tilted to the downside; U.S budget deficit reduction in 2013 excessively rapid, could lower medium-term potential growth; long period of exceptionally low interest rates could have unintended consequences for U.S. financial stability; while Fed has tools for exit, significant challenges involved in unwinding monetary easing; views U.S. dollar a mildly overvalued, current account deficit larger than level consistent with fundamental.'
On the data front, U.S. University of Michigan consumer confidence in July came in at 85.1, better than the forecast of 84.0. French consumer confidence in July was released at 82, better than the forecast of 79.
Data to be released next week :
Japan retail sales, China leading index, U.K. hometrack housing survey, CBI distributive trades, U.S. pending home sales on Monday.
Japan household spending, unemployment rate, industrial production, German consumer confidence, HICP, CPI, EU economic sentiment, business climate, consumer confidence, Canada CPI, U.S. retail sales, S&P home price index, consumer confidence on Tuesday.
New Zealand business confidence, Japan manufacturing PMI, housing starts, construction orders, U.K. BRC shop price index Swiss UBS consumption indicator, KOF leading indicator, German unemployment change, unemployment rate, France PPI, Italy PPI, CPI, HCIP, unemployment rate, EU CPI, unemployment rate, U.S. ADP employment, GDP, personal consumption, PCE core, Chicago PMI, FOMC rate decision, Canada GDP on Wednesday.
Australia New home sales, China manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, German manufacturing PMI, EU manufacturing PMI, Rate decision, U.K. Rate decision, U.S. Jobless claim, construction spending, ISM manufacturing on Thursday.
Australia PPI, Swiss PMI, U.K. construction PMI, EU PPI, U.S. Non-farm payroll, unemployment rate, average hourly earnings, PCE, Durable goods, factory orders on Friday.
Dollar falls against yen on speculation of Fed stimulus
The greenback fell sharply against the Japanese yen on Friday on speculation that the Federal Reserve will announce to keep its low interest rates for longer at its Wednesday's monetary policy meeting.
Versus the Japanese yen, dollar was under pressure throughout the day. Despite a recovery from Thursday's low at 98.87 to 99.41 in Australian morning, the pair met renewed selling at Tokyo open and fell to 98.62 in Asia due to selloff in Japan's Nikkei-225 index. Later, price edged lower in European session and penetrated previous key support at 98.26 to a one-month low at 97.95 in New York morning due to active cross buying of yen versus other currencies. Price traded narrowly in New York afternoon and closed at 98.27.
The single currency edged higher from Asian low at 1.3269 and rose 1-tick above Thursday's top at 1.3296 to 1-month peak at 1.3297 in European morning, however, lack of follow-through buying prompted profit-taking, euro retreated to 1.3253 in New York morning but then staged a recovery to 1.3295. Later, despite another brief retreat to 1.3255, price rebounded after failure to penetrate 1.3253 support and later edged to 1.3290, price closed at 1.3279.
The British pound traded narrowly in Asian session and rose briefly to 1.5417 in European morning, however, cross selling of sterling versus euro pressured the pair to 1.5356 in New York morning before staging a recovery to 1.5394 in U.S. afternoon.
In other news, EU Commission said 'Eurogroup working group has approved payment of next tranche of aid to Greece.' Portuguese Finance Minister Albuquerque said '1H government budget gap 3.4% of GDP vs planned 3%; Portugal needs a fiscal system that makes it more competitive; recent uncertainty made bond investors cautious, need to assure them government is stable.' IMF board said 'risks to U.S. economic outlook appear modestly tilted to the downside; U.S budget deficit reduction in 2013 excessively rapid, could lower medium-term potential growth; long period of exceptionally low interest rates could have unintended consequences for U.S. financial stability; while Fed has tools for exit, significant challenges involved in unwinding monetary easing; views U.S. dollar a mildly overvalued, current account deficit larger than level consistent with fundamental.'
On the data front, U.S. University of Michigan consumer confidence in July came in at 85.1, better than the forecast of 84.0. French consumer confidence in July was released at 82, better than the forecast of 79.
Data to be released next week :
Japan retail sales, China leading index, U.K. hometrack housing survey, CBI distributive trades, U.S. pending home sales on Monday.
Japan household spending, unemployment rate, industrial production, German consumer confidence, HICP, CPI, EU economic sentiment, business climate, consumer confidence, Canada CPI, U.S. retail sales, S&P home price index, consumer confidence on Tuesday.
New Zealand business confidence, Japan manufacturing PMI, housing starts, construction orders, U.K. BRC shop price index Swiss UBS consumption indicator, KOF leading indicator, German unemployment change, unemployment rate, France PPI, Italy PPI, CPI, HCIP, unemployment rate, EU CPI, unemployment rate, U.S. ADP employment, GDP, personal consumption, PCE core, Chicago PMI, FOMC rate decision, Canada GDP on Wednesday.
Australia New home sales, China manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, German manufacturing PMI, EU manufacturing PMI, Rate decision, U.K. Rate decision, U.S. Jobless claim, construction spending, ISM manufacturing on Thursday.
Australia PPI, Swiss PMI, U.K. construction PMI, EU PPI, U.S. Non-farm payroll, unemployment rate, average hourly earnings, PCE, Durable goods, factory orders on Friday.
